Daily market review

United States

Sectors including utilities, consumer staples, and health care led most equity indexes slightly higher Friday while weakness in growth stocks, including the FAANGs, kept the market in check. Hopes for another round of US fiscal stimulus appeared balanced by worries over new shutdowns as Covid-19 cases accelerated in many US states. The Dow Jones industrial index declined 0.2 percent while the S&P 500 and NASDAQ both rose 0.3 percent.

Other outperforming sectors included materials, especially precious metals miners, and industrials, led by trucking, after upbeat quarterly results. Lagging were consumer discretionary, financials, energy, and worst off was the communications services sector amid FAANG weakness.

Netflix, down 6.5 percent, was a notable loser after missing the market's aggressive earnings expectations and projecting slower subscription growth. Microsoft, down 0.5 percent, was another drag after announcing staff cuts. Amazon was off 1.3 percent, and Apple was down 0.2 percent as growth stocks remained out of favor vs. value shares.

Among companies in the news, JB Hunt, the trucking and logistics giant, rose 3.2 percent on an earnings and revenues beat. Other truckers, Heartland Express, up 3.8 percent, and Marten Transport, up 6.2 percent, reported better than expected quarterly results. Among other winners, Blackrock, the big asset manager, rose 3.7 percent after an earnings and revenues beat.

On the downside, Regions Financial fell 4.4 percent after showing an unexpected quarterly loss. Crocs declined 4.7 percent after a downgrade at CL King in light of valuation concerns after the huge rally in the shoemaker's shares. State Street fell 4.4 percent after negative analyst comments on the financial service company's rising credit reserves.

In US economic data, consumer sentiment lost nearly 5 points to 73.2, about 6 points below Econoday's consensus. This index had been trending near 100 before the virus crisis erupted. Meanwhile, housing starts jumped 17.3 percent in June but the 1.186 million annual rate remains far short of the 1.6 million area pre-crisis. And permits, after coming off a big 14.1 percent rebound in May, managed only a 2.1 percent gain in June to a 1.241 million rate.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 17 cents to US$43.12 while spot gold rose US$14.18 to US$1,810.38. The US dollar declined against most major currencies but it rose vs. the Canadian dollar and the Chinese yuan. The US Treasury 30-year bond yield rose 1 basis points to 1.32 percent while the 10-year note yield was unchanged at 0.62 percent.


Equities ended mixed to slightly higher Friday in cautious trading ahead of the outcome of a meeting of European Union leaders to consider a stimulus plan for Europe. The Europe-wide STOXX 600 edged up 0.2 percent, the German DAX rose 0.4 percent, the French CAC slipped 0.3 percent, and the UK FTSE-100 rose 0.6 percent.

Positive company news gave UK and German stocks a boost while worries about rising Covid-19 cases in the US and some flare-ups in Continental Europe weighed on markets.
UK shares were powered by a 3.9 percent rise in AstraZeneca on expectations for positive results in clinical trials for its Covid-19 vaccine.

German shares were bolstered by a rally in autos after Daimler, up 3.0 percent, reported a smaller-than-expected loss for the second quarter. Rio Tinto, up 2.5 percent, led miners higher after reporting rising iron shipments and recovering demand from China. Ericsson, the Swedish telecom equipment maker, rose 12 percent on an earnings beat.

On the downside, Hexpol, the Swedish chemicals maker, dropped 9 percent on an earnings miss. Travel & leisure shares lagged the most, with Scandic Hotels off 6.4 percent after an earnings miss. Norwegian Air fell 8 percent after agreeing to higher staffing costs after taking on direct responsibility for pilots and crew from its separate staffing unit, OSM.

Asia Pacific

Major Asian markets posted mixed results both on the day Friday and on the week, with key regional data, ongoing Covid-19 developments, and escalating US-China tensions all continuing to provide guidance to regional investor sentiment. The Shanghai Composite index stabilized Friday after dropping sharply Thursday, closing the day up 0.1 percent but finishing the week down 5.0 percent. Hong Kong's Hang Seng index also advanced 0.5 percent on the day but fell 2.5 percent on the week. Japan's Nikkei and Topix indices both fell 0.3 percent on the day but were among the strongest performers in the region on the week with gains of 1.8 percent and 2.5 percent respectively, while Australia's All Ordinaries index closed up 0.4 percnet on the day and 1.8 percent on the week.

Singapore's non-oil domestic exports rose 16.1 percent on the year in June after falling 4.6 percent in May, with both electronics and non-electronic exports increasing sharply after earlier declines. The rebound in headline exports growth in June reflects stronger year-on-year growth for seven of Singapore's top ten trading partners, including China, the European Union and Japan. Total imports fell 9.9 percent on the year after a sharp decline of 26.2 percent previously.

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